The suspension of expenditure transactions on taxpayer's bank accounts is provided for in Chapter 14, Article 118 of the Code of the Republic of Kazakhstan "On Taxes and Other Mandatory Payments to the Budget" dated December 25, 2017 No. 121-VI (hereinafter referred to as the Tax Code). According to the norms of this article, the suspension of expenditure transactions on bank accounts of a legal entity, an individual registration as an individual entrepreneur, a person engaged in private practice, is carried out in accordance with the procedure established by the laws of the Republic of Kazakhstan, in the following cases:
1) failure by a taxpayer to submit tax reports within the time limits established by this Code – after thirty working days from the day following the day of delivery of the notification;
2) failure by the taxpayer to submit a tax application for registration for value added tax – after thirty working days from the date of delivery of the notification;
3) non-repayment of tax arrears in the amount of more than 6 times the monthly calculation index established by the law on the republican budget and effective on January 1 of the relevant financial year, by a taxpayer classified in accordance with the risk management system as a high–risk category - after one working day from the date of delivery of the notification of repayment of tax arrears; the average level of risk, – after ten working days from the date of delivery of the notification of repayment of tax arrears;
4) non–admission of officials of a tax authority to a tax audit and inspection of taxable objects and (or) objects related to taxation, except in cases of violation of the procedure for conducting a tax audit established by this Code, - within five working days from the date of non-admission;
5) the return by a postal or other communication organization of a notification sent in connection with the absence of a taxpayer (tax agent) at the location – within five working days from the date of return;
6) failure to comply with the notification on the elimination of violations identified by the tax authorities based on the results of desk control – after five working days from the date of expiration.
The suspension of expenditure transactions on bank accounts applies to all expenditure transactions of the taxpayer, except for transactions for the payment of taxes and payments to the budget, customs payments provided for by the legislation of the Republic of Kazakhstan, social payments, penalties accrued for their late payment, as well as fines to be paid to the budget; withdrawal of money according to executive documents providing for the satisfaction of claims on compensation for damage caused to life and health, as well as claims for the recovery of alimony; on repayment of tax arrears, arrears of social payments. The order of the tax authority on the suspension of expenditure transactions on the taxpayer's bank accounts shall be issued in the form established by the authorized body in coordination with the National Bank of the Republic of Kazakhstan, and shall enter into force from the date of its receipt by a second-tier bank or an organization engaged in certain types of banking operations.
The tax authority sends such an order to second-tier banks or organizations engaged in certain types of banking operations on paper or in electronic form by transmission over a telecommunications network. When sending an order of the tax authority on the suspension of expenditure transactions on the taxpayer's bank accounts in electronic form, such an order is formed in accordance with the formats established by the authorized body together with the National Bank of the Republic of Kazakhstan. The order of the tax authority on the suspension of expenditure transactions on the taxpayer's bank accounts is subject to unconditional execution by second-tier banks or organizations engaged in certain types of banking operations, and is executed in the order of priority established by the Civil Code of the Republic of Kazakhstan.
The repayment by the taxpayer of the amount of tax arrears specified in the order of the tax authority on the suspension of expenditure transactions on the taxpayer's bank accounts is the basis for the resumption by a second-tier bank or an organization carrying out certain types of banking operations of expenditure transactions on the bank accounts of such a taxpayer. A second-tier bank or an organization engaged in certain types of banking operations, on the day of repayment of tax arrears, resumes spending operations on bank accounts until the cancellation of the order of the tax authority on the suspension of spending operations on the taxpayer's bank accounts. The order on the suspension of expenditure transactions on bank accounts is canceled by the tax authority that issued the order on the suspension of expenditure transactions, no later than one business day following the day of elimination of the reasons for the suspension of expenditure transactions on bank accounts.